Midland sets record low with 2.1 percent unemployment rate

Published 4:00 pm, Friday, January 23, 2015

Employers talk with potential new employees Tuesday at the MRT Career Fair at the Midland Center. Tim Fischer\Reporter-Telegram

Employers talk with potential new employees Tuesday at the MRT Career Fair at the Midland Center. Tim Fischer\Reporter-Telegram

Photo: Tim Fischer

Midland sets record low with 2.1 percent unemployment rate

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Midland’s unemployment rate fell to a record 2.1 percent in December, down from 2.3 percent in November and 2.9 percent in December 2013.

The Tall City continued to report the state’s lowest unemployment rate, followed by Odessa with 2.6 percent unemployment, down from 2.8 percent in November, according to figures released Friday by the Texas Workforce Commission.

Willie Taylor, chief executive officer of Workforce Solutions Permian Basin, thinks this is the “last time for awhile” Midland will have a falling unemployment rate.

Offices in the 17 counties Taylor oversees are already seeing an increase in first-time unemployment claimants, he said.

He said some companies were being aggressive in laying off workers, while others are attempting to hold onto workers by cutting overtime.

He predicted January figures will start to reflect the area’s slowing oil field activity, and “in February and March we’ll really start seeing” how oil prices below $50 a barrel will impact Permian Basin employment.

Even so, Taylor predicted Midland and Odessa would remain among the state’s metropolitan areas with low unemployment, in large part because so many jobs had gone unfilled amid the oil and gas boom.

As laid-off workers file unemployment claims, he said they “will continue working to place them in jobs, whether it’s with the city, county, in health care, the schools, as truck drivers, as diesel mechanics. We don’t want anyone on unemployment long-term.”

Sam Lawson, who owns the local Burger King and Popeyes franchises, said he is already seeing the effects of a slowing oilpatch.

“We’re already seeing a difference from a month ago. We’ve gone from not being able to find anyone to fill jobs to having more fully staffed stores,” he said.

To attract workers, Lawson said he had raised wages as much as he could.

“This business doesn’t give you a lot of room to maneuver, but I did what I could.”

He said he plans to continue offering current wage levels. And while he’s happy to have more workers in his restaurants, he said he’s also hoping oil prices go back up.

A booming oil industry might be tough on other businesses, such as restaurants, “but the overall benefits far outweigh the challenges,” he said.

Keith Phillips, senior economist and research officer with the Federal Reserve Bank of Dallas, said he wasn’t surprised Midland’s unemployment rate had continued to decline in December.

“It’s an indication of the phenomenal growth Midland and Odessa have experienced,” he said.

He said December data was too early to start reflecting the impact of falling oil prices. He noted that the rig count didn’t begin to decline until mid-December. Even though oil prices peaked at about $107 in June and began to decline, by October they were still about $86 a barrel.

“There was no impact until November-December, when companies got worried. But it didn’t affect drilling,” he said.

That reflected the oil and gas industry’s strength, he said.

Phillips said activity will notably slow in the first quarter and in the second quarter the area will start seeing job losses.

“The areas with the biggest benefits from the increase in oil drilling will be the hardest hit,” he said.

“I tell people in the Eagle Ford to look to Midland-Odessa for lessons in handling a downturn. They knew it wouldn’t last forever but this is a relatively new phenomenon in the Eagle Ford. They’ll see jobs lost, incomes fall. But I tell them it won’t go back to the way it was because there’s been a lot of wealth created and that wealth won’t go away. Incomes may fall but wealth won’t go away.”

Midland saw 200 new jobs created from November to December. The 100 jobs gained in the mining, logging and construction sector, and the 300 jobs created in the trade, transportation and utilities sector were offset by 100 jobs lost each in education and health services and leisure and hospitality.

For the 12 months from December 2013 to December 2014, Midland added 5,300 jobs, for a growth rate of 6 percent. Mining, logging and construction added 3,400 jobs, followed by 700 in trade, transportation and utilities.

Midland’s civilian labor force dipped below 100,000 for the first time since at least October, coming in at 99,924, down from 100,230 in November.

Statewide, the unemployment rate posted its fourth consecutive monthly decline, coming in at 4.6 percent, down from 4.9 percent in November. The December figure was the lowest since May 2008.

In a statement, newly inaugurated Gov. Greg Abbott said, “Job creation is the lifeblood of our state — and Texas’ history of strengthening job growth equates to more opportunity for all Texans. The state of Texas will continue to promote fiscally responsible policies that sustain our position as No. 1 in the nation for economic opportunity and give Texans across the state the means to invest in the future of their families.”

While Midland had the state’s lowest unemployment, the highest was in McAllen-Edinburg-Mission at 7.8 percent.